"Microsoft doesn't understand that people travel around the world, and are hugely sentimental about things they've paid for. Here's a list of some services that are affected by Windows Live ID billing region locks and what you will lose if you move countries." It ain't pretty.

I changed my region when I moved from Europe to US. And my Xbox is working fine. I do not know whether they disabled it now, but the option still seems to be there at: https://account.live.com/editprof.aspx